The Central Bank of Nigeria (CBN) has spent $15.9 billion in nine months in its weekly intervention in the foreign exchange (forex) market.

This is coming as the Investors’ & Exporters’ Forex Window has recorded over $27.8 billion in turnover and brought about transparency and stability in the market.

Nigeria’s current account stabilised in surplus position, expanding to $9.6 billion annualised in nine months, from $2.7 billion in fiscal year 2016, according to Ayodeji Ebo, Chief Executive of Afrinvest Securities Limited.

Ebo said foreign investors will be happy to see the interest rate remain at 14 per cent, even as the stability in the market has helped the foreign investors know that the economy is stable. “Foreign portfolio investments provide liquidity and confidence to the market. And keeping the interest rate at 14 per cent will help keep them coming,” he said.

Ebo sees no interest rate cut in spite of expressed optimism by the governor of the Central Bank of Nigeria (CBN) that the bank will begin a gradual cut in monetary policy rates by the end of the second half of the year.

Speaking at the Finance Correspondents Association of Nigeria (FICAN) Economic Outlook with theme: ‘Nigeria Economy and Financial Market Outlook: 2017 Review and 2018 Outlook’ held at the FICAN Centre, Lagos, he said a rate cut would be unlikely due to the high risks associated with the economy.

The CBN governor had on Wednesday, said the apex bank plans to begin a gradual rate cut by the end of the first half of the year as inflation continues to subside. Inflation which had risen to almost 19 per cent last year January had maintained a steady decline standing at 15.37 in Cut

Emefiele in an interview said once inflation gets to low double digit “and high single digit happens, then it should be easy for the Monetary Policy Committee (MPC) to begin to look at easing. I want to think that between the end of the first and second quarter, we should begin to see easing.”

Ebo stated that a cut in rate would impact rates at the money market causing investors to consider putting their funds in other countries where the risks are not as high with a good enough returns in investment.

“This will affect the current stability at the foreign exchange market and that is what the government would not want at a time the country is approaching an election period.” He explained further that while the argument for a cut in rates is for increased lending to the real sector, a lower benchmark interest rate would not result in increased lending by banks.

“Bringing down the MPR will not translate to improved lending by the banks. There is nothing like patriotic lending because we have to grow the economy. The banks will not use private money to grow the economy when they still see there is evident risks within the space. It is about the risk environment.

Most of the companies that they would have borrowed to are struggling in terms of returns on their investment as they have factor in the cost of power as well as infrastructure and by the time you factor in those things your business is not profitable and you cannot service your loan so the bank will not lend to you.

“For instance a lot of banks lent to the power sector during the privatisation but a lot of them got their hands burnt, so no matter how low interest rate come that will not translate proportionately to increased lending as long as they continue to see that risks.